Agriculture

FY18-19 Biennial Budget Change Item

Change Item Title: Waste Pesticide Collection Fee

Fiscal Impact ($000s) FY 2018 FY 2019 FY 2020 FY 2021
General Fund blank Blank Blank Blank
Expenditures 0 0 0 0
Revenues 0 0 0 0
Agricultural Fund Blank Blank Blank blank
Expenditures 850 850 850 850
Revenues 850 850 850 850
Net Fiscal Impact = 0 0 0 0
(Expenditures Revenues)
FTEs 0 0 0 0

Recommendation:
The Governor recommends increasing the waste pesticide surcharge paid by firms distributing pesticides. This increase will
cover rising disposal and collection costs for waste pesticides collected through cooperative agreements and MDA sponsored
collections to ensure that Minnesota residents continue to have statewide access to waste pesticide collection sites. Increased
fee levels are expected to raise additional revenue of $1.7 million biennially, which would be deposited in the agricultural fund
and dedicated to the Waste Pesticide Collection Program.

Rationale/Background:
Base funding is used for MDA staff and county partners to provide a means to safely dispose of unwanted and unusable
pesticides through the Waste Pesticide Collection Program. Waste Pesticide Collection Program base funding provides
pesticide users in every county around the state the opportunity to dispose of unwanted agricultural (ag) pesticides through
county household hazardous waste facilities, their mobile events or by attending MDA scheduled events.

Expenses to collect and dispose of collected waste pesticides now exceed program revenues and the annual collection of non-
agricultural waste pesticides continues to rise. The imbalance between revenues and expenses is approximately -$400,000 this
past year and is expected to grow, making the program unsustainable at the current fee level. This deficit is currently funded by
the Pesticide Regulatory Account, which is the account that funds the agencys regulation of pesticides. While M.S. 18B allows
the Department to use this account to pay for the waste pesticide collection, it is unsustainable in the long term. Moreover, the
waste pesticide surcharge and corresponding Waste Pesticide Account were specifically established to pay for the costs of this
program.

Non-agricultural waste pesticides collected for disposal continues a steady annual increase. Program collection expenses
across the board continue to rise. New revenue is needed to cover rising program costs and ensure that collection sites are
maintained across all counties. The increase will be proportional so the surcharge on non-agricultural pesticides will be set to
cover disposal costs of these products; and the surcharge on agricultural pesticides will be set to cover disposal costs of these
products. A reserve will be maintained to cover higher than expected costs in a given year.

Proposal:
This is a change to the existing Waste Pesticide Collection Program.

MDA has established a successful statewide pesticide waste collection program, however review of program funding has
determined that it is not financially sustainable in the long term. New revenues are needed to cover program costs including
disposal expenses for non-agricultural and agricultural waste pesticide collected and establishing a reserve with a minimum and
maximum balance to cover program expenses. Increased waste pesticide surcharge amounts are proposed to sustain the
pesticide waste collection program.

State of Minnesota 10 2018-19 Biennial Budget

January 2017
The amount of non-agricultural waste pesticides collected each year has grown substantially with greater accessibility to
collections through cooperative agreements. The Department estimates that the collection waste stream is roughly comprised
of 375,000 pounds or more of household waste pesticide and 50,000 pounds of farm waste pesticide. We expect yields of non-
agricultural waste pesticides collected to continue at their current level or to increase as they have for the past several years
and agricultural waste yields to remain steady as more cooperative agreements are put in place to target agricultural waste
pesticide.

The waste pesticide surcharge is paid by manufacturers/distributors that register products for sale and use in Minnesota. This
proposal raises the waste pesticide surcharge on registered products proportionately to reflect the composition of the waste
stream. The fee proposal raises the waste pesticide surcharge on approximately 10,000 non-agricultural pesticides registered
from $50 per product registered to $125 per product register. The fee proposal raises the waste pesticide surcharge on
approximately 3,650 agricultural pesticides registered from $50 per product registered to $75 per product register.

The waste pesticide collection program is a highly successful environmental program. Cooperative agreements exist to collect
non-agricultural waste pesticides with every county collection authority in the state, and to collect agricultural pesticides with
most county collection authorities in the state. The MDA collects agricultural waste pesticides in counties that are not under
agreement. This proposal will enable residents of the state to safely dispose of unwanted, unusable and dangerous waste
pesticides.

Results:
The programs initial target was farm waste pesticide. These pesticides had been stored for years and mostly kept in aging
containers. Many of the pesticides were very hazardous and found in surprisingly large quantities. Over the years, the nature
of the waste stream changed and today collections capture more household waste than farm waste. In recent years, the
majority of waste pesticide collected for disposal is delivered to a county household hazardous waste facility that operates under
cooperative agreements with MDA.

Currently, all counties signed a cooperative agreement to collect household waste and most also collect farm waste.
Collections operated from county sites offer the most program efficiencies, convenience and cost benefits. MDA will continue to
reach out to counties to establish cooperative agreements to collect farm waste pesticide.

Type of Measure Name of Measure Previous Current Dates

Quantity Number of Collection site and events Ongoing in most
counties
Quality Convenience and accessibility of Local
collections accessibility
Results Amount of waste pesticide collected 477,804 lbs. 2015
and properly disposed

Statutory Change(s):
This proposal will require statutory change to M.S. Section 18B.065.

State of Minnesota 11 2018-19 Biennial Budget

January 2017